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☆ As Economy Sputters, U.K. Cuts Taxes Ahead of Election
▼ + stars: | 2023-11-22 | by ( Eshe Nelson | More About Eshe Nelson | ) www.nytimes.com time to read: +2 min

Last week, data showed that Britain’s inflation rate had dropped to 4.6 percent in October, and Mr. Sunak declared victory in his pledge to halve inflation this year. The government’s fiscal credibility was also severely damaged by the unfunded tax cuts of Liz Truss’s short premiership. When he was installed as chancellor a year ago, Mr. Hunt took a cautious approach to the nation’s money and abandoned nearly all of Ms. Truss’s plans. He said there was little scope for spending increases and tax cuts because debt levels needed to be cut and the government had to be careful not to stoke inflationary pressures. Now with the election in sight, Mr. Hunt has found the money to offer some sweeteners in the form of lower taxes and even a freeze on alcohol duty.

Persons: ” Mr, Hunt, Rishi Sunak, Sunak, Liz Truss’s, Truss’s, Stephen Castle Organizations: Bank of England’s Locations: United States, Western Europe

☆ Suella Braverman fired as David Cameron returns to UK government
▼ + stars: | 2023-11-13 | by ( Rob Picheta | ) edition.cnn.com time to read: +10 min

The hardline Home Secretary Suella Braverman was fired early on Monday morning, after making inflammatory comments about the policing of pro-Palestinian protests in central London over the weekend. Cameron served as prime minister from 2010 to 2016, resigning after Britain voted to leave the European Union in a referendum that he had called. Unlike Braverman, neither Cleverly nor Cameron are likely to go off script and lash out at the police or protesters. Monday marks the second time in just over a year that Braverman has been sacked as home secretary. Under Sunak, Braverman spearheaded a heavily publicised push to clamp down on small boat crossings made by asylum-seekers.

Persons: London CNN — Britain’s, Rishi Sunak, David Cameron, Suella Braverman, Sunak, Cameron, Downing, James, Braverman, London’s, Braverman’s, ” Neil Basu, we’ve, King Charles, Alec Douglas, –, Edward Heath’s, “, ”, —, ” Cameron, Tories ’, Carl Court, Boris Johnson, Liz Truss, Jeremy Hunt, they’d, Liz Truss’s shambolic, lambasting “, Keir Starmer, ” Starmer Organizations: London CNN, Britain, European Union, Downing Street, Times, London, Sunak, BBC, Downing, Conservative Party, Liberal Democrats, Tories, EU, Braverman, Human, Rwanda –, Conservatives, Labour Party Locations: London, Braverman, Downing, Westminster, Cameron, Rwanda, Britain, United Kingdom

☆ Rishi Sunak suffers two election losses as British voters reject ailing Conservative government
▼ + stars: | 2023-07-20 | by ( Rob Picheta | ) edition.cnn.com time to read: +4 min

The Conservative Party lost to the resurgent Labour Party in Selby and Ainsty, a region in the north of England where the Sunak’s party had enjoyed a commanding majority. But the results indicate that the opposition Labour Party, which under the leadership of Keir Starmer is on course to clinch power when Sunak calls a general election. But in Selby, in the north of England, Labour overturned a huge deficit to win the seat with 46% of the votes, according to PA. The results amount to a significant rejection of Sunak’s Conservative Party, which has been in power for 13 years and has seen its opinion poll ratings nosedive towards the end of Johnson’s tenure, and since. Sunak will now look to steady his leadership and fight off any growing murmurs of a challenge within his party.

Persons: London CNN — Britain’s, Rishi Sunak, Boris Johnson, Sunak, Keir Starmer, Liz Truss’s shambolic, Steve Tuckwell, Johnson, “, Nigel Adams, Johnson’s, ” Organizations: London CNN, Conservative Party, Labour Party, Liberal Democrats, Conservatives, Labour, Conservative, Britain’s Press Association, Sunak’s Conservative Party Locations: Selby, Ainsty, England, Somerton, Frome, Uxbridge, South Ruislip

☆ Trounced, Conservatives Feel Voters’ Wrath in English Heartlands
▼ + stars: | 2023-05-17 | by ( Stephen Castle | ) www.nytimes.com time to read: +1 min

LITTLEWICK GREEN, England — Aged 22 and not long out of college, George Blundell never expected to win when he ran in municipal elections against a Conservative Party bigwig in a region long loyal to the Tories. But for a young, enthusiastic, former politics student it still seemed worth a shot. It’s not something you get to do every day, is it?” recalled Mr. Blundell, a member of the centrist Liberal Democrats, as he sipped a beer outside the village pub where he once washed dishes as a summer job. To his surprise, Mr. Blundell is now a councilor representing the area around Littlewick Green, having defeated the powerful incumbent in perhaps the biggest upset from local elections that have sent shock waves through Britain’s governing Conservative Party. Unhappy about Brexit and aghast at the economic chaos unleashed during Liz Truss’s brief leadership last year, traditional Conservative voters are deserting the party in key English heartlands, contributing to the loss of more than 1,000 municipality seats in voting this month.

☆ ‘A Trump tribute act’: Meet Suella Braverman, the commander-in-chief of Britain’s culture wars
▼ + stars: | 2023-05-07 | by ( Rob Picheta | ) edition.cnn.com time to read: +14 min

London CNN —Late last year, after a breakneck ascent of British politics put her in charge of the country’s migration, crime and national security agenda, Suella Braverman revealed her political fantasy. Leon Neal/Getty ImagesAnd she is an equally furious culture warrior, borrowing rhetoric from the American right when lambasting “woke” culture, transgender rights and climate protesters. Sameer Al-Doumy/AFP/Getty ImagesIt is a stance that has drawn sharp criticism – including from within the traditional wing of Braverman’s Conservative Party. Should Braverman succeed at her next bid for the party leadership, her critics fear another rightwards shift in British politics. “She’s recognized that in the current political climate, her way of creating an impact… (is) positioning herself as a Trump tribute act.

☆ Shadow banks: The other financial firms worrying investors and regulators
▼ + stars: | 2023-04-06 | by ( Anna Cooban | ) edition.cnn.com time to read: +7 min

London CNN —The International Monetary Fund warned this week of “vulnerabilities” among so-called non-bank financial institutions, saying global financial stability could hinge on their resilience. The term encompasses financial firms, other than banks, that provide all manner of financial services, including lending to households and businesses. The sector has grown strongly since the global financial crisis in 2008, with its asset base expanding by 7% a year on average, according to FSB data. Non-banks that provide credit are known as “shadow banks,” although the term is often used imprecisely to mean all non-banks. Shadow banks now make up about 14% of the world’s financial assets and, like many non-banks, operate without the same level of regulatory oversight and transparency as banks.

☆ Bank of England calls for urgent action on funds that nearly toppled UK financial system
▼ + stars: | 2023-03-29 | by ( Julia Horowitz | ) edition.cnn.com time to read: +3 min

London CNN —The Bank of England has called for urgent action to address a weak spot in the UK financial system as persistent worries about the global banking sector threaten to unleash fresh market turmoil. LDI crisisThe role of LDI funds in the UK financial system was thrown into the spotlight in the fall after the Truss budget triggered an unprecedented selloff in UK government bonds. This had an alarming knock-on effect on pension funds that had gone all in on liability-driven investment strategies. “We are monitoring events closely and their impact on financial markets, UK banks and UK economic conditions,” it said. The central bank added that UK banks were “resilient” and “currently healthy.” But it warned that other parts of the financial system might need bolstering.

☆ UK house prices post sharpest fall since 2012
▼ + stars: | 2023-03-01 | by ( Hanna Ziady | ) edition.cnn.com time to read: +3 min

London CNN —UK house prices last month saw their biggest annual decline since November 2012, in the latest indication of the lasting pain that former Prime Minister Liz Truss’s ill-fated “mini” budget inflicted on Britain’s property market. The average price of a house fell 1.1% to £257,406 ($310,000) in February compared with a year earlier, taking UK house price growth into negative territory for the first time since June 2020, lender Nationwide said Wednesday. House prices have now declined for six months in a row and are 3.7% below their August 2022 peak, according to Nationwide’s index based on purchases involving a mortgage. “The economy has largely moved on from the mini budget, but the hangover for the UK housing market is more prolonged. Mortgage rates have started to fall but recent stronger-than-expected UK economic data could lead the Bank of England to keep interest rates higher for longer, causing the downward drift in mortgage rates to “stall,” he told CNN.

☆ The fog in the English Channel is clearing a bit
▼ + stars: | 2023-01-16 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

But if the two sides can resolve a dispute over Northern Ireland there could be progress on topics such as climate change, foreign policy and financial services. Resolving the dispute over the so-called Northern Ireland Protocol is the key to unlocking cooperation on a range of topics. But a deal on Northern Ireland could be. Johnson agreed to such a forum as part of the political declaration accompanying the Brexit deal but then abandoned it. “Fog in the Channel: Continent cut off” is a mythical UK newspaper headline which supposedly summed up Britain’s disdain for its neighbours.

☆ UK bond dealers see jump in gilt issuance for 2023/24 - Reuters poll
▼ + stars: | 2022-11-16 | by ( David Milliken | ) www.reuters.com time to read: +4 min

However in the 2023/24 financial year, gilt issuance is expected to jump to 238 billion pounds, according to the median poll forecast, the second highest ever after the 486 billion pounds of issuance in 2020/21 to fund COVID-19 support measures. “It feels like there shouldn’t be too many surprises, but the gilt market remains febrile, and even small news could create oversized reactions,” he said. Gilt issuance is distinct from public sector net borrowing (PSNB), the main borrowing measure forecast by Britain’s Office for Budget Responsibility. Here GEMMs expect PSNB, excluding public-sector banks, to rise to a median 187 billion pounds, almost double the 99 billion pounds forecast by the OBR in March. Next year it is forecast to fall to 142 billion pounds, versus an OBR forecast of 50.2 billion pounds.

☆ UK house prices fall as buyers count cost of mini-budget, property website Rightmove says
▼ + stars: | 2022-11-14 | by ( Suban Abdulla | ) www.reuters.com time to read: +2 min

LONDON, Nov 14 (Reuters) - Asking prices for British residential properties are dropping and there are signs that the fallout from the "mini-budget" bond market rout is weighing on first-time buyers, property website Rightmove said on Monday. Asking prices for homes dropped 1.1%, or by 4,159 pounds ($4,886.41) month-on-month in the Oct. 9 - Nov. 5 period, after a 0.9% rise over the previous month, Rightmove said. But Rightmove said former prime minister Liz Truss’s growth plan, which triggered a steep rise in borrowing costs when it was announced in September, accelerated Britain’s property market slowdown. Rates have since eased back after the announcement of Rishi Sunak as prime minister calmed financial markets. In annual terms, property prices were up 7.2% in November, slowing from a rise of 7.8% the month before.

☆ Watch: The Fast Rise of Rishi Sunak, Britain’s New Prime Minister
▼ + stars: | 2022-10-25 | by ( Wall Street Journal | ) www.wsj.com time to read: 1 min

Watch: A Timeline of Liz Truss’s 45 Days as U.K. Prime Minister Liz Truss became the shortest-serving U.K. prime minister and the first since Winston Churchill to serve two monarchs when she resigned after just 45 days in power. WSJ’s David Luhnow explains how her premiership came crashing down. Photo illustration: Adele Morgan

☆ Rishi Sunak: U.K. Faces a ‘Profound Economic Challenge’
▼ + stars: | 2022-10-24 | by ( Wall Street Journal | ) www.wsj.com time to read: 1 min

☆ Watch: A Timeline of Liz Truss’s 45 Days as U.K. Prime Minister
▼ + stars: | 2022-10-23 | by ( Wall Street Journal | ) www.wsj.com time to read: 1 min

Watch: China’s Ex-Leader Hu Jintao Escorted Out of Party Congress Footage shows former Chinese leader Hu Jintao being accompanied off stage at the Communist Party congress, where he was sitting next to President Xi Jinping. Beijing didn’t immediately return questions on what happened. Photo: Mark R Cristino/Shutterstock

☆ Watch: China’s Ex-Leader Hu Jintao Escorted Out of Party Congress
▼ + stars: | 2022-10-22 | by ( Wall Street Journal | ) www.wsj.com time to read: 1 min

☆ Truss’s exit highlights America’s free pass
▼ + stars: | 2022-10-21 | by ( Lauren Silva Laughlin | ) www.reuters.com time to read: +3 min

While British Prime Minister Liz Truss’s tax proposals cut her time in office short, U.S. fiscal policy for years hasn’t been that much different. If it weren’t for the greenback’s status as the world’s reserve currency, the laws of economics would apply to America, too. Her ideological mentors in America have long argued that such tax cuts pay for themselves, and they are nothing new stateside. Still at least by some measures, the United States looks worse than Truss’s country. While Truss’s policy experiment wasn’t given any rope, the United States seems to know no failure.

☆ Britain’s bond crisis reverses over the government: podcast
▼ + stars: | 2022-10-20 | by ( Aimee Donnellan | ) www.reuters.com time to read: 1 min

LONDON, Oct 20 (Reuters Breakingviews) - New finance minister Jeremy Hunt has scrapped most of his predecessor’s unfunded tax cuts, scuppering Prime Minister Liz Truss’s growth plan. In this Viewsroom podcast, Breakingviews columnists debate what the U-turn means for markets – and whether Truss can survive. Listen to the podcastFollow @aimeedonnellan on TwitterRegister now for FREE unlimited access to Reuters.com RegisterEditing by Thomas Shum and Oliver TaslicOur Standards: The Thomson Reuters Trust Principles. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Breakingviews: Time for Britain to try technocratic government
▼ + stars: | 2022-10-18 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +4 min

Technocratic governments tend to take charge after an elected administration has collapsed, and rule for a short period with a limited mandate. Prime Minister Liz Truss’s technosceptic administration recklessly attempted to boost growth by cutting taxes, startling investors and forcing the Bank of England to step in. For example, Alec Douglas-Home parachuted into a parliamentary seat shortly after becoming prime minister in 1963. A more fundamental concern is that technocratic governments undermine faith in democracy. If Britain is going to replace another prime minister without an election, it could do a lot worse than a technocrat.

☆ Time for Britain to try technocratic government
▼ + stars: | 2022-10-18 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +4 min

Technocratic governments tend to take charge after an elected administration has collapsed, and rule for a short period with a limited mandate. Prime Minister Liz Truss’s technosceptic administration recklessly attempted to boost growth by cutting taxes, startling investors and forcing the Bank of England to step in. Britain could surely find a vacant constituency for a reassuringly technocratic new leader. A more fundamental concern is that technocratic governments undermine faith in democracy. If Britain is going to replace another prime minister without an election, it could do a lot worse than a technocrat.

☆ Massive fiscal U-turn leaves UK in political funk
▼ + stars: | 2022-10-17 | by ( Pierre Briancon | ) www.reuters.com time to read: +4 min

By the tax year ending in April 2027 this should help the government claw back 32 billion pounds of the 45 billion pounds a year Kwarteng and Truss had planned. Beyond that, the scheme, which the government had estimated might cost some 60 billion pounds over six months, will become less generous. The pound strengthened against the U.S. dollar while yields on 10-year UK government bonds declined by nearly 45 basis points. But they remain at 12-year highs, suggesting that the UK has much to do to regain credibility with global investors. Government spending cuts will also be required to narrow a hole in public finances that the Sunday Times reported was as big as 72 billion pounds ($81 billion).

☆ Bailey outburst blunts BoE crisis-fighting tools
▼ + stars: | 2022-10-12 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

LONDON, Oct 12 (Reuters Breakingviews) - Andrew Bailey is in danger of blunting the Bank of England’s crisis tools. The UK central bank governor on Tuesday vowed to end emergency bond-buying that has been propping up pension funds, even as investors increasingly assumed the scheme might get extended. Indeed, 30-year bond yields have risen further on Wednesday. Lastly, if Bailey is indeed forced to U-turn by extending the programme, he will have damaged the bank’s credibility. The BoE announced a 65 billion pound government bond purchase scheme on Sept. 28 to help indebted pension funds facing margin calls avoid being forced to sell gilts.

☆ Breakingviews: Bailey outburst blunts BoE crisis-fighting tools
▼ + stars: | 2022-10-12 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

LONDON, Oct 12 (Reuters Breakingviews) - Andrew Bailey is in danger of blunting the Bank of England’s crisis tools. The UK central bank governor on Tuesday vowed to end emergency bond-buying that has been propping up pension funds, even as investors increasingly assumed the scheme might get extended. Indeed, 30-year bond yields have risen further on Wednesday. CONTEXT NEWSBank of England Governor Andrew Bailey reiterated in a speech on Oct. 11 that the bank planned to its cease its emergency government bond purchases on Oct. 14. The BoE announced a 65 billion pound government bond purchase scheme on Sept. 28 to help indebted pension funds facing margin calls avoid being forced to sell gilts.

☆ BoE drawn into risky game of financial whac-a-mole
▼ + stars: | 2022-10-11 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

On Tuesday, the UK central bank said it would buy more bonds to avert a fire sale by pension funds. But its plan to end such support on Friday is hampered by a distressed bond market, and wayward government. Prime Minister Liz Truss’s unfunded plan to cut taxes had triggered a surge in government bond yields, which in turn forced indebted pension funds to sell assets. Register now for FREE unlimited access to Reuters.com RegisterThere are plenty of signs that the bond market remains distressed. Without a credible fiscal strategy, investors may continue to steer clear of UK gilts.

☆ Breakingviews: BoE’s bond-buying U-turn is worth the risk
▼ + stars: | 2022-09-28 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

The fallout makes it even harder for Governor Andrew Bailey to convince markets he can tighten monetary policy. His decision on Wednesday to buy UK government debt and delay plans to sell down its 857 billion pound ($915 billion) bond portfolio carries big risks. Bailey’s goal is to cut holdings by 80 billion pounds over the next year. UBS analysts reckon issuance of gilts, after factoring in sales and redemptions from QT, will reach 355 billion pounds in the year ending March 2024. If Bailey can now tighten monetary policy without freaking out investors, his U-turn will have been worth the risk.

LONDON—Four decades after Ronald Reagan , new U.K. Prime Minister Liz Truss is betting that a dose of tax cuts, new spending and deregulation will do for the British economy what a similar recipe did in the early 1980s for the U.S.: lead to an economic revival. On Friday, Ms. Truss’ government is expected to announce a series of tax cuts, including cutting taxes for new home purchases as well as reversing planned hikes in the corporate tax and cutting a recent increase in payroll taxes. It will also abolish limits on bonuses for bankers and allow fracking for shale gas across the U.K.

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